The use of consultants in the public sector has been a useful way of obtaining specialist advice and providing skills which the public sector may not have for particular tasks.

The initial use of consultants was substantial because of the requirement to radically overhaul the organisation and management of the N.S.W. public sector. The report of the committee of Audit (the Curran Committee) was essential and a large number of consultants were engaged to ensure the task was completed quickly.

The reforms instituted by the Government continue and as the improved management skills and knowledge spread through the public sector, there is a lesser need for the use of consultants. In the current economic climate, it is imperative to critically assess all expenditure and maintain a tight control on costs.

There will continue to be situations in which it will be eminently sensible to use consultants with clear specialist skills. Every well managed Government uses consultants where it is possible to demonstrate clearly that they add value to a project or process.

In the current climate, fees have dropped significantly and when consultants are engaged, it is essential that services should be competitively priced and of high quality.

Over the last six to nine months, senior partners of major professional and consultancy firms have been offering to provide services at rates between $800$1,110 a day for their services and commensurately lower rates for less qualified or experienced staff There has also been an increase in the number of firms and individuals which are prepared to offer fixed fees for projects.

It is not my' intention to set a schedule of fees which Departments and agencies should pay for consultants. The example cited above indicates there is an opportunity for the public sector to secure consultancy services at very competitive prices.

The purpose of this memorandum is to ask you and your Chief Executives to:

• critically assess the need to engage consultants
• ensure that in accordance with the Office of Public Management's guidelines on the use of consultants, which I released last year, the terms of reference for consultants are well defined
• ensure that the fees are competitive and consistent with the quality required
• check that the quality required is being delivered and the timetable being adhered to and the costs are within the agreed budget.

As part of the process of reviewing public sector performance, I will be asking O.P.M. to analyse and advise about the use of consultants prior to the 1991-92 Ministerial-Chief Executive Officer review.

Nick Greiner MP

Issue-: DG's Unit
Date: 26-06-91